Banks, insurers lift FTSE
Fiona Cincotta June 10, 2020 7:01 PM
The FTSE has started the day on a brighter note, lifted by a rally across the banking and insurance sector ahead of the FOMC meeting later Wednesday.
The FTSE has started the day on a brighter note, lifted by a rally across the banking and insurance sector ahead of the FOMC meeting later Wednesday. The meeting is expected to be largely uneventful in terms of rate changes but the focus will be on the Fed’s outlook for the US economy as, on the one hand the job market is picking up much faster than expected, while on the other the country is being shaken by two-week long protests.
In London, Tesco is also among the main gainers, still benefiting from Britain’s audit watchdog dropping an inquiry into the overstatement of the company’s 2014 profits.
In contrast, Vodafone shares were hit by a fairly short-lived technical problem that created connection issues Tuesday evening. Although the problem was resolved quickly investors sold off the telecom’s shares as soon as the market opened. But a problem that Vodafone will not be able to wave away that quickly, and that will be an issue for other UK telecom firms, is that the blocking of Huawei from the UK’s plans for its 5G network could cause a delay in the rollout of the technology across the country, and slow down predicted pick up in demand that was expected to accompany it.
Brent dips on Goldman, China numbers
After a brief push above the $43 level Brent crude prices settled back in a narrow range between $40-$41/bbl but remain vulnerable to the downside after Goldman Sachs said that the outlook for crude oil remains bearish. The US bank predicts that Brent will fall to $35 because demand remains weakened by COVID 19 and China, which used to be the main driver of all demand growth, is actually not recovering as quickly as expected.
Today’s consumer inflation data from China is showing lower numbers than expected as domestic demand, particularly for expensive items and luxury goods, is taking a long time to pick itself up.
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